As we look at how America has changed, often it is difficult to notice changes that take place over time. This plays well into the hands of corporations and lobbyists who work with short term goals. There was a time when corporations made longer term plans, but that will be another topic to be discussed soon. But let’s look at prices and wages today as compared with the past. Here are some interesting comparisons:
In economic terms, when prices keep getting lowered on products that provide the same benefit at the lower price as they did at the higher price, we end up with a situation in which there is a smaller margin. That smaller margin means there is less money remaining to pay for wages. We have been in this “low price cycle” for many years in which people are taught to shop for the lowest price, and at the same time the middle class has experienced an overall decline in wages.
Are the marketers right? Do low prices actually increase the standard of living?
Think about all of the problems that have been in the press concerning substandard goods. Think about some of the products we used to make in America that lasted virtually forever. Now we live in a much more “disposable” economy in which goods are purchased for a low price, but often they must be replaced much sooner.
If we changed our thoughts about prices, might that also help Americans see wage increases again?
I know it sounds strange, but think about it.
- Wal-Mart’s slogan went from being “Made in America” to “the low priced leader”.
- The nation’s largest employer for many years was General Motors. Now it is Wal-mart. The average page of a Wal-mart employee is far less than GM paid in terms of cost of living.
- With all the hype about getting the lowest price, marketers have taught people to believe that low prices mean a better standard of living. Wal-mart’s newest slogan is “Save Money. Live Better.”
In economic terms, when prices keep getting lowered on products that provide the same benefit at the lower price as they did at the higher price, we end up with a situation in which there is a smaller margin. That smaller margin means there is less money remaining to pay for wages. We have been in this “low price cycle” for many years in which people are taught to shop for the lowest price, and at the same time the middle class has experienced an overall decline in wages.
Are the marketers right? Do low prices actually increase the standard of living?
Think about all of the problems that have been in the press concerning substandard goods. Think about some of the products we used to make in America that lasted virtually forever. Now we live in a much more “disposable” economy in which goods are purchased for a low price, but often they must be replaced much sooner.
If we changed our thoughts about prices, might that also help Americans see wage increases again?
I know it sounds strange, but think about it.